What Is Stock Turnover Ratio?
Understand how the inventario turnover ratio measures how efficiently a business sells and replaces its inventario over a given period.
Key Takeaways
- Stock turnover ratio measures how many times inventario is sold and replaced during a period.
- A higher ratio generally indicates efficient inventario management and strong ventas.
- The ideal turnover rate varies significantly by industry and business model.
What the Stock Turnover Ratio Measures
The inventario turnover ratio, also called inventario turnover, measures how frequently a company sells through its entire inventario during a specific period, typically a year. It indicates how efficiently a business converts inventario into ventas. A higher turnover means inventario moves quickly, suggesting strong demand and effective inventario management. A lower turnover may indicate overinventarioing, weak ventas, or obsolete inventario sitting on shelves.
How to Calculate Stock Turnover
The formula is: Stock Turnover Ratio = Cost of Goods Sold / Average Inventory. Average inventario is calculated as (Beginning Inventory + Ending Inventory) / 2. For example, if a business has annual COGS of $500,000 and average inventario of $100,000, the turnover ratio is 5, meaning it sells through its inventario five times per year, or roughly every 73 days.
Interpreting the Ratio
What constitutes a good turnover ratio depends heavily on industry. Grocery minoristaers may turn inventario 12-20 times per year due to perishable goods, while furniture minoristaers might turn inventario only 4-6 times. Comparing turnover against industry punto de referencias and the company
Improving Stock Turnover
Businesses can improve turnover by better matching purchases to demand through predicción, reducing lead times with local sourcing, implementing clearance strategies for slow-moving inventario, and optimising product assortment. Demand planning tools and point-of-sale data análisis help identify trends early. However, pursuing extremely high turnover can backfire if it leads to frequent inventarioouts that drive clientes to competitors.